Agriculture, transportation, education and health sectors have huge opportunities for insurance and leasing products, Managing Director, Law Union & Rock Insurance Plc, Mr. Jide Orimolade, has said.
He stated this in a paper entitled: “Building Synergy between Insurance and Leasing Industry: Opportunities, Product Development and Key Success Factors”, delivered at Equipment Leasing Association of Nigeria, (ELAN) First Quarter Business Forum, which held in Lagos.
Orimolade stated that the leasing and insurance companies are presently not doing very well in the agricultural, education, healthcare, and transportation sectors compared to the potential that exist in those sectors.
He noted that based on the businesses done between the two sectors in the past five years, over 90 per cent are transactional in nature and are generated in the normal course of business and not through deliberate solution work-out or new thinking.
He believed that there could be a closer and deeper business relationship between the insurance sector and the leasing companies, making them to collaborate on what he described as “lease- insure model” for business synergy.
The Law Union & Rock chief said the volume of insurance transactions from leasing companies was far below the market potentials, therefore, there is need to move away from transaction approach and focus on long term, formidable partnerships to create the needed synergy, cut cost, and improve operational efficiency in order to move their companies forward.
He said: “There are lots of opportunities for the two businesses if they create and maintain seamless handshake between the insurance industry and leasing companies. There are three key sectors we are not doing very well in compared to the potentials. These are agricultural, education, healthcare, and transportation sectors.
“Nigeria has the largest population in Africa and one of the largest globally, presenting a huge potential market for our business. Despite the large population, insurance penetration still remains low. With the current Market Development Restructuring Initiative (MDRI) efforts of the industry players and the regulator, insurance penetration in Nigeria is expected to reach a penetration level of 10 per cent in 2025. This will translate into insurance premiums, running into trillions of naira. This growth will largely be driven by growth of micro, small and medium enterprises (MSMEs), supported by expanding credits, which leasing companies will play a key role,” he added.
Source: Guardian
